How much coverage do I need? This question cannot be satisfied with a single answer without considerations about several factors that can directly or indirectly influence ones decision. First consideration falls to the category of a legal obligation. Well most states nowadays are setting minimum requirements for motor vehicle insurance. Indeed how much you need when it comes to car insurance coverage is partially determined by your state laws and across state it varies.
If you had your vehicle through a loan or lease you have another consideration to remember. Your finance institute or bank will most likely to set certain standards for the type of insurance you will avail. Normally a Collision coverage and Comprehensive Insurance are prerequisites of banks or finance institutes.
The next party with a say on how much protection will you need on the road is yourself. More than anyone else you know yourself best thus a careful assessment will help you decide. This may include how much you can afford when it comes to auto insurance policy.
Now let us look at another “must-be-considered” aspect of your driving milieu- your car. What kind of ride are you going to drive also matters? A specific car types needs a specific type of protection.
If you are using a used car chances are your premium rate will be lower than insuring a brand new car. Used cars have lesser value than new ones. It is posting lesser risk in general since older cars are most likely to be of older models. As compared with newly purchased cars this lesser valued vehicle tend to allure thieves and criminal offenders minimally.
The cars’ lesser value is due to the fact that cars values depreciate and this depreciation happens quickly starting from the moment a brand new car was used. Since old cars have lesser value, in cases of theft or being damaged irreparably, the insurance company will not spend a lot to cover the car as compared when they are to cover for a damaged or stolen new ride. Therefore if you are going to drive an older car you can lower your Collision and Comprehensive Insurance. By doing so you are just saving more from your premium payment. You also have the liberty to drop fully your Collision and Comprehensive Coverage. It all depends on your assessment of your needs. Assessing your car’s age can also be helpful in deciding whether to just lower or entirely drop the two.
Know your car’s value and depreciation rate to help you finalize your decision about what your car really needs?